Price rises this April could each household will see their monthly costs rise £49.45 – with state pensioners warned they are directly in the firing line.
State pensioners face a £1,780 extra savings burden as ‘Awful April’ price rises loom. Price rises this April could each household will see their monthly costs rise £49.45 – with state pensioners warned they are directly in the firing line.
To cover your emergency cash buffer, Hargreaves Lansdown think you should hold one to three years’ worth of expenses. It states: “It’s a sizeable amount, but once you’re retired and typically living on a lower income, it’s harder to top up your pot, should you need to access it. We’ve used ONS data to show the average household expenditure for people aged 60 and over.
“The figures are split into essential expenses, which are goods or services purchased because they meet a basic need (food, shelter, or healthcare). And total expenses which include essential and non-essential purchases.”
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Sarah Coles, head of personal finance at Hargreaves Lansdown said: “April is going to be every bit as awful as you’d expect this year. Price hikes will squeeze household budgets even harder, and it also has a knock-on effect on how much we need in emergency savings.”
Energy
The price cap will rise by 6.4 per cent, adding £111 a year to the average household bill. With these price hikes, retirees will need to add between £593 and £1,780 to their emergency savings, depending on how many years’ worth of essential expenses they aim to cover. Before April 2025, a retiree needing one year’s worth of emergency savings would require £24,744.
After the price rises, that figure jumps to £25,337, meaning they must save an additional £593.
Council Tax
Local authorities can increase tax by up to five per cent, meaning Band D households could pay £109 more per year. Ms Coles said: “You’d be forgiven for thinking that at a time when so many costs are rising, the last thing you need is to put more money away. But the sooner you can build your savings pot, the better—because you never know when an emergency will strike.”
Water
Set to rise by an average of £123 per year, marking a 26 per cent increase. For storing emergency funds, Ms Coles recommends easy-access savings accounts or cash ISAs to ensure money is readily available when needed. She added: “Check online banks and cash savings platforms, as they often offer better rates.”
She warned: “It often makes sense to save for emergencies and contribute to pensions at the same time. If you have surplus income, you could split it—part into savings, part into retirement investments—so you’re prepared for both the short term and the future.”
Broadband and mobile
Mid-contract price hikes will see average bills rise by £50.40 annually. Up to three years’ worth of expenses is a lot to hold in an easily accessible account, and you will almost certainly lose out if you don’t use fixed terms for portions of your cash.
For example, holding £20,000 in an average instant access account gets you £546 in interest after a year (assuming the rate stays the same).
Car tax
Standard rates will rise to £195, with new petrol and diesel vehicles facing first-year charges up to £440. New electric vehicles will also be taxed for the first time, at £195 per year.
TV Licence
The cost of a standard colour TV licence will increase by £5 to £174.50 per year. Ms Coles said: “If you have dependents, a variable income, or past health issues, you’ll likely need a bigger emergency fund. But if you have a stable job, good health, and family support, you might feel comfortable with less.”